ISLAMABAD: Finance Minister Muhammad Aurangzeb has directed the Securities and Exchange Commission of Pakistan (SECP) to simplify the regulatory framework for corporate bonds, aiming to reduce the private sector’s heavy reliance on bank lending.
Chairing a meeting of the Capital Market Development Council (CMDC) on Wednesday, the Finance Minister emphasized that Pakistan must transition toward a “balanced financial system” where capital markets complement the banking sector. He noted that a vibrant corporate debt market remains essential for mobilizing long-term domestic savings and driving private sector-led growth.
During the session, the Minister expressed concern over structural bottlenecks that currently hinder the growth of the bond market. He instructed the SECP to enhance its outreach and ensure that corporations and financial institutions fully understand recent facilitation measures, including reduced documentation requirements and digitized issuance processes.
“A deeper corporate bond market will diversify funding channels for businesses,” Aurangzeb stated, adding that current reliance on bank loans limits the scope for large-scale infrastructure and manufacturing projects.
The council also reviewed the existing tax framework. Stakeholders highlighted that fiscal reforms and improved market-making mechanisms are necessary to boost secondary market liquidity. Currently, most corporate bonds in Pakistan remain privately placed with negligible trading activity, a trend the government now seeks to reverse.
The Finance Minister further urged authorities to adapt international best practices from regional markets to strengthen investor confidence. He reaffirmed that a robust capital market serves as a key pillar for the country’s financial stability and sustainable economic development.
The meeting saw participation from the SECP Chairman, the State Bank of Pakistan, and representatives from the Pakistan Stock Exchange and the Pakistan Business Council.